According to the real-business-cycle perspective

Question

Quizplus · Accepted Answer

According to the real-business-cycle perspective, the economy operates efficiently on its own without the need for government intervention or policy activism. Business cycles are seen as the natural result of regular fluctuations in productivity and technological advancements. Therefore, active policy making is not considered an effective means of stabilizing the economy, making choice A the best answer. The Phillips curve is less important in this perspective because policy interventions intended to reduce unemployment will only lead to inflation in the long term.

According to the Real-Business-Cycle Perspective